Minority college can't claim complete immunity from fee regulation, says SC

A law college in Indore refused to submit its fees to the state regulator, citing minority rights. The Supreme Court just told them: you can propose your own fees, but you can't opt out entirely. The judgment landed on a Friday in March 2023, and it drew a line that had been blurry for years — between the constitutional right of minority institutions to run their own affairs, and the state's power to stop them from charging whatever they pleased.

When the fee regulator came calling

Icon Education Society runs two professional colleges in Indore — a law college and a nursing college. In 2019, Madhya Pradesh's Admission and Fee Regulatory Committee (AFRC — a state body that oversees fees and admissions in private professional institutions) asked the law college to submit a fee proposal for review. The society refused. Its argument was simple: we are a minority educational institution. Article 30(1) of the Constitution gives us the right to establish and administer our own institutions. That includes the right to set our own fees. No regulator can touch that.

The AFRC disagreed. It told the college that the state's 2007 Act — the MP Niji Vyavsayik Shikshan Sanstha (Pravesh Ka Viniyaman Avam Shulk Ka Nirdharan) Adhiniyam — applied to all professional institutions, minority or not. The committee insisted it would fix the fees itself.

Three losses, then the Supreme Court

The society lost at every level before reaching the Supreme Court. The AFRC rejected its exemption request in November 2019. The statutory appellate authority (a body that hears appeals under the 2007 Act) dismissed the appeal in January 2020. A review petition (a request to reconsider the decision) was thrown out with costs in March 2020. The Madhya Pradesh High Court dismissed the society's writ petition (a legal challenge to the government's action) in November 2020, relying on earlier Supreme Court rulings that had already settled the basic framework.

By the time the matter reached the Supreme Court in March 2023, the core question was sharp: can a minority institution simply walk away from fee regulation altogether?

What the Constitution actually says

Article 30(1) guarantees minorities the right to establish and administer educational institutions of their choice. This is a fundamental right — not a privilege granted by the state. The Supreme Court has long held that this right includes the freedom to decide the institution's fee structure, admissions policy, and administrative setup. But the court has also held, in a series of judgments starting with T.M.A. Pai Foundation (2002) and continuing through P.A. Inamdar (2005) and Modern Dental College (2016), that this right is not absolute.

The key limitation: no profiteering, no capitation fees (a fee charged over and above the regular tuition, often in exchange for admission). The state can regulate fees to prevent these two things. The question is how much regulation is permissible before it becomes an invasion of the minority's constitutional right.

Why the regulator couldn't fix fees — but the college couldn't ignore it either

The Supreme Court bench — Justice Dinesh Maheshwari and Justice Sanjay Kumar — began by clarifying what the 2007 Act actually allows the AFRC to do. This was crucial because the Act's language, on its face, appeared to give the committee the power to "determine" fees. But the Constitution Bench in Modern Dental College had already read down (interpreted narrowly to save its constitutional validity) Sections 4 and 9 of the Act. The court in that case held that the AFRC does not have the power to unilaterally fix fees for any institution — including non-minority ones. Instead, the committee can only review the fee proposal that the institution itself submits, and ensure it does not involve profiteering or capitation fees.

Applying this interpretation, the Supreme Court in Icon Education Society held that the AFRC's communications purporting to "fix" fees were impermissible. The committee had overstepped. But the court also rejected the society's claim to complete immunity. A minority institution, the bench said, cannot claim that the AFRC has no jurisdiction over it at all. The institution must submit its proposed fees to the committee. The committee can then review those proposals — not rewrite them — to check for profiteering or capitation fees.

The line the court drew

The judgment is careful to preserve the minority institution's right to devise its own fee structure. "Setting up a reasonable fee structure is a component of the right to establish and administer an institution within the meaning of Article 30(1)," the court said. "Every institution is free to devise its own fee structure, subject to the limitation that there can be no profiteering and no capitation fee."

This is the core of the ratio (the court's central reasoning). The minority institution proposes. The regulator reviews. The regulator cannot impose its own numbers. But the institution cannot refuse to participate in the process at all.

What this means for every minority institution

For the hundreds of minority professional colleges across India — law, medical, engineering, nursing — this judgment offers both clarity and a warning. You can set your own fees. You must submit them for review. The regulator can say no if you are profiteering. But the regulator cannot tell you what to charge in the first place.

The practical takeaway: minority institutions should prepare a detailed, transparent fee proposal with a clear breakdown of costs — faculty salaries, infrastructure, maintenance, reserves. Submit it to the state fee regulatory body. If the body tries to fix fees unilaterally, you now have a Supreme Court judgment that says that is impermissible. But if you refuse to submit anything at all, you are on the wrong side of the law.

THE PLAY: Submit your fee proposal to the regulator — but make sure your proposal is backed by audited financials and a clear explanation of how every rupee is spent. The regulator can review; it cannot rewrite.

The court disposed of the appeal with no order as to costs. The law college in Indore walked away with a clarification, not a victory. And every minority institution in the country walked away with a rule: propose, don't hide. Review, don't dictate.